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The Social and Productive Impacts of Zambia’s Child Grant

By Sudhanshu Handa, David Seidenfeld, Benjamin Davis, Gelson Tembo and the Zambia Cash Transfer Evaluation Team

As part of APPAM's ongoing effort to showcase JPAM authors' work to the APPAM membership and the public policy world at large, we asked JPAM article authors to answer a couple of questions about their research. Sudhanshu Handa answered for us.

What's this article about?

Over the last two decades targeted cash transfer programs have become increasingly used as the main policy intervention for addressing poverty and vulnerability in developing counties. Evidence on conditional cash transfers, primarily from Latin America, is well documented but there is much less evidence from sub-Saharan Africa, where programs tend to be unconditional, beneficiaries are much poorer and complementary services less available. This article presents results from the impact evaluation of the Government of Zambia’s Child Grant Program, an unconditional cash transfer program targeted to families with very young children in three rural districts of the country. Rather than focusing on one specific domain such as health or education, the article presents results across a range of domain, both social and economic, motivated in part by the fact that the program is unconditional and households can thus use the cash for any purpose they wish.

Results based on a multi-site longitudinal social experiment indicate that after two years, the program has had positive impacts on consumption and food security which are key objectives of the grant. Of particular interest are the large positive impacts on productive activity such as spending on agricultural inputs, participation in non-farm business, crop production, livestock ownership and cash savings. On the other hand, direct impacts on children’s health and nutrition, a key program objective, are weak and depend on other factors such as availability of piped water and mother’s education. Overall the results show that an unconditional cash transfer in this environment can play an important role in protecting consumption and food security as well as generating economic investment, activities that are directly under the control of households, while outcomes that require complementary inputs (such as health facilities) are not affected by cash alone.

What was the genesis of the idea for your research/paper?

This paper is part of a large multi-country research program that seeks to understand the full impacts of national cash transfer programs in sub-Saharan Africa (SSA). The genesis of the idea occurred in 2008 when UNICEF started to actively engage governments to consider social protection as an integral part of its policy response to child poverty in SSA. The evidence on cash transfers at that time primarily came from Latin America and was based on conditional cash transfers while in SSA, due to supply side and human capacity constraints unconditional programs were more feasible. UNICEF and partners decided to embark on a research program to build the evidence base around unconditional cash transfers in SSA through the Transfer Project https://transfer.cpc.unc.edu/. Through this initiative almost a dozen large scale, rigorous impact evaluations were implemented with UNICEF and national governments. This article reports the results from one of these studies—the Zambia Child Grant Program.

What is the main conclusion that becomes evident from your research? (Or, what is your main takeaway?)

This article takes a unique approach in the evaluation of cash transfers by reporting results across ALL main outcome areas of the program, while typical articles only focus on one domain such as health or schooling. And because the program is unconditional, and households can use the cash as they wish, it is not immediate obvious where the main impacts might be found, making it even more interesting to look at the full range of potential outcomes.

The main takeaway is that small, predictable unconditioned transfers to the extreme poor are transformative. Not only did the program increase food security and overall consumption, which is what we would expect, it also had a productive impacts, with significant increases in livestock holdings, agricultural output, savings and even housing quality. The results highlight the fact that the extreme poor, when given the opportunity through an unconditional transfer, make smart decisions to improve their well-being.

What are some of the more interesting or surprising findings/conclusions did you find in the process of bringing this together?

One somewhat interesting result is the strong impact of the program on entrepreneurship, primarily small-scale businesses run by women (virtually all recipients of the cash are women). Hence households use the cash to diversify their income sources. In rural Africa a key driver of poverty reduction is non-farm income, so this result suggests that the program may allow households to move out of poverty. The result is surprising given the extreme poverty of the beneficiaries (average consumption is 44 cents per person per day). Micro-finance and similar programs aimed at stimulating productive activity and entrepreneurship do not target the poorest of the poor on the premise that these households are ‘too poor’ to benefit from such programs. Our results show that in fact, the ultra-poor can and do engage in entrepreneurship on their own, when they have the means.

Sudhanshu Handa is Professor of Public Policy at the University of North Carolina Chapel Hill and currently on-leave serving as Chief of Social & Economic Policy at UNICEF’s Office of Research—Innocenti Center. He is the PI of the Transfer Project, a multi-country research initiative to understand the impacts of national cash transfer programs in sub-Saharan Africa, a joint initiative of UNICEF, UNC, FAO and Save the Children. Through the Transfer Project he has collaborated with students and faculty from the Universities of Ghana, Zimbabwe, Zambia and Malawi.

Prof. Handa’s recent research entails measuring the impact of poverty alleviation programs on children’s outcomes, and on behavioral parameters such as time- and risk-preferences of household members. He previously worked for IFPRI, the Inter-American Development Bank, and was a faculty member at the Eduardo Mondale University and University of the West Indies-Mona Campus. Prof. Handa was born in Ghana and is an avid fan of the Black Stars. For more info, visit, http://www.cpc.unc.edu/people/fellows/bio?person=shanda.Sudhanshu's Twitter handle is @ashudirect and his blog can be found here, http://ashudirect.weebly.com/